Legal

NY Federal Reserve Partners With Bangladesh Bank To Sue Over $81M Hack

The Federal Reserve Bank of New York announced that it will formally assist Bangladesh Bank in a lawsuit to recover funds stolen by hackers.

In 2016, the central bank of Bangladesh asked the NY Fed  as well as the central bank and money laundering authorities in the Philippines  to help recover money that was stolen when cybercriminals hacked into Bangladesh’s systems and sent fraudulent orders via the SWIFT global payments network to the NY Fed. While $1 billion was requested, $81 million was eventually sent to accounts at Manila-based Rizal Commercial Banking Corporation (RCBC), then to Philippine casinos. So far, only about $15 million has been recovered.

Now, the NY Fed has signed an agreement to give Bangladesh Bank “technical assistance … in its litigation against those who were complicit in the fraud,” according to a joint statement one day after the lawsuit was filed in U.S. court. The statement added that the two will be “meeting jointly with the relevant agencies or parties in the Philippines to strongly encourage them to assist in the recovery of stolen funds,” and that the fraud “represents a threat to the international funds transfer system.”

In addition, a source told Reuters that the NY Fed would prepare affidavits, and approve employees to testify at hearings or a trial, as well as allow Bangladesh Bank representatives to interview employees on relevant issues.

The court filing, submitted this week in the U.S. District Court in Manhattan, revealed that Bangladesh Bank is suing RCBC for its involvement in a “massive” and “intricately planned” plot to steal the money.

“We welcome this complaint, as it is an opportunity for RCBC to put on record again that it was a victim of what was started in Bangladesh by still unnamed persons,” RCBC said on Wednesday (Jan. 30) before the suit was filed.

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